United States District Court, E.D. California
For Kathy Torchia, an individual residing in California, Plaintiff: Jared Hague, LEAD ATTORNEY, Sutton Hatmaker Law Corporation, Fresno, CA; S Brett Sutton, LEAD ATTORNEY, Sutton Hague Law Corp, Fresno, CA.
For W.W. Grainger, Inc., an Illinois Corporation, Defendant: Christopher M. Ahearn, Douglas J. Farmer, LEAD ATTORNEYS, Ogletree, Deakins, Nash, Smoak & Stewart, P.c., San Francisco, CA; Henry F. Galatz, LEAD ATTORNEY, PRO HAC VICE, W.W. Grainger, Inc.
Jennifer L. Thurston, UNITED STATES MAGISTRATE JUDGE.
ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR ATTORNEY FEES AND CLASS REPRESENTATIVE ENHANCEMENT (Doc. 38)
ORDER GRANTING THE PARTIES' JOINT MOTION FOR FINAL APPROVAL OF CLASS SETTLEMENT (Doc. 42)
Plaintiff Kathy Torchia and Defendant W.W. Grainger, Inc. seek certification of the Settlement Class and final approval of the settlement terms. (Doc. 42.) In addition, Plaintiff seeks an award of attorney's fees from the Settlement fund; costs in the amount of $10, 000; and a class representative enhancement. (Doc. 38.) Defendant does not oppose these requests, and no objections were filed by class members.
For the following reasons, final approval of the Settlement is GRANTED . In addition, Plaintiff's request for attorney fees is GRANTED in the modified amount of 20% of the gross settlement, and her request for an incentive payment is GRANTED in the modified amount of $7, 500.
FACTUAL AND PROCEDURAL HISTORY
Plaintiff initiated this action by filing a complaint in Kern County Superior Court on May 31, 2013. (Doc. 1 at 11.) She brought her claims " on behalf of herself and all other similarly situated current and former employees of [Defendant]." (Id. at 13.) Defendant filed a Notice of Removal on September 6, 2013, thereby initiating the matter before this Court. (Doc. 1.) Defendant asserted the Court has original jurisdiction over the action pursuant to the Class Action Fairness Act, because the parties are diverse and the matter in controversy exceeded $5 million. (Id. at 3-4.)
Plaintiff filed a First Amended Complaint on November 12, 2013. (Doc. 14.) Plaintiff asserts Defendant is liable for (1) failure to pay minimum wages in violation of Cal. Labor Code § § 1197, 1194 and 1194.2; (2) failure to pay overtime in violation of Cal. Labor Code § 510; (3) failure to provide meal periods or additional wages in lieu thereof; (4) failure to provide rest periods or additional wages in lieu thereof; (5) failure to issue accurate wage statements in violation of Cal. Labor Code § 226; (6) failure to reimburse employees for business related expenses in violation of Cal. Labor Code § 2802; (7) failure to timely pay wages due to upon termination in violation of Cal. Labor Code § § 201, 202 and 203; (8) and violations of California's unfair competition laws, as set forth in Cal. Bus & Prof. Code § 17200, et seq. (See id. at 12-26.) Further, Plaintiff sought penalties pursuant to the Private Attorneys General Act (" PAGA") for the alleged Labor Code violations. (Id. at 26.) Defendant filed its Answer on December 13, 2013. (Doc. 15.)
The Court issued its Scheduling Order governing the action on January 9, 2014. (Doc. 18.) The parties engaged in discovery, and Plaintiff " issued formal written discovery requests in or about February 2014." (Doc. 25 at 11.) In response to the requests for discovery, Defendant " produced extensive electronic data and hard copy documents equivalent to thousands of pages of documentary evidence." (Id.) In addition, Plaintiff took the deposition of Brian Williams, Defendant's Regional Vice President of Customer Service and Defendant's person most knowledgeable pursuant to Federal Rule of Civil Procedure 30(b)(6). (Id.)
The parties engaged in private mediation with Mark Rudy on May 15, 2014. (Doc. 25 at 11.) Although the matter was not resolved on that date, the parties continued to work with Mr. Rudy, and " ultimately gave their tentative agreement to the terms of a settlement on or about May 28, 2014." (Id. at 12.) Plaintiff filed an unopposed motion for preliminary approval of the class settlement and conditional certification of the Settlement Class on July 16, 2104. (Docs. 24-25.)
The Court granted preliminary approval of the class settlement on August 13, 2014. (Doc. 33.) The Court appointed Plaintiff as the Class Representative, and authorized Plaintiff to seek an award enhancement up to $20, 000 for her representation of the class. (Id. at 17.) In addition, the Court appointed S. Brett Sutton and Jared Hague as the Class Counsel, and authorized Class Counsel to seek fees that did not " exceed 33 1/3% of the gross settlement amount and costs up to $10, 000." (Id. at 18-19.) On August 28, 2014, the Court approved the Class Notice that conveyed this information to Class Members. (Doc. 35.) In addition, the Class Notice Packet informed the Class Members of the nature of the action, the class definition approved by the Court, the claims and issues to be resolved, how a class member may enter appear through an attorney or chose to be excluded from the class, the time and method to opt-out of the class, and the binding effect of a class judgment. ( See id.)
The Settlement Administrator mailed the Class Notice Packet to 2, 047 Class Members. (Doc. 45 at 3, Behring Decl. ¶ 6.) Of the mailed Notices, 18 were undeliverable because the Settlement Administrator was unable to locate a current address. (Id., ¶ 10.) Class Members were instructed to submit Claim Forms on or before November 17, 2014 to receive a settlement share. (Doc. 33 at 18.) A total of 909 Class Members submitted the requisite Claim Form. (Doc. 45 at 4, Behring Decl. ¶ 14.) In addition, the Settlement Administrator received 94 Exclusion Forms, eight of which were deemed invalid because " the Class Members also . . . timely filed Claim Forms." (Id., ¶ 16.) No objections were received by the Settlement Administrator or filed with the Court.
The parties filed the joint motion for final approval of the Settlement on December 1, 2014. (Doc. 42.) The parties have consented to the jurisdiction of the assigned magistrate judge pursuant to 28 U.S.C. § 636(c)(1) for the limited purposes " of approval and administration of the settlement agreement recently entered into by the parties." (Docs. 21, 22.)
Pursuant to the settlement agreement (" the Settlement"), the parties agree to a gross settlement amount not to exceed $2, 750, 000. (Doc. 26 at 19, Settlement ¶ ¶ 22-23.) Defendant agrees to fund the Settlement by providing funds to the Claims Administrator fourteen days after the Court issues a final order approving the terms of the Settlement. (Id. at 19, 26, Settlement ¶ ¶ 19, 48.)
I. Payment Terms
The settlement fund will cover payments to class members with additional compensation to the Class Representative. (Doc. 25 at 2; Doc. 26 at 19.) In addition, the Settlement provides for payments to Class Counsel for attorneys' fees and expenses, to the Settlement Administrator, and the California Labor & Workforce Development Agency. (Doc. 26 at 34, Settlement ¶ 61.) Specifically, the Settlement provides for the following payments from the gross settlement amount:
o The Class Representative will receive up to $20, 000;
o Class counsel will receive no more than $916, 575 for attorneys' fees, which equals 33.33% of the gross settlement amount, and $10, 000 for expenses;
o The California Labor and Workforce Development Agency shall receive $7, 500 from the total award of $10, 000 under PAGA; and
o The Settlement Administrator will receive up to $22, 000 for fees and expenses.
(Doc. 26 at 29-30, Settlement ¶ ¶ 53-56.) After these payments have been made, the remaining money (" Net Settlement Amount") will be distributed as settlement shares to Class Members. (Doc. 26 at 20, 34, Settlement ¶ ¶ 28, 61.)
To receive a settlement share from the Net Settlement Amount, a class member was required to submit a timely and valid claim form. (Doc. 26 at 32, Settlement ¶ 59.) Settlement shares were be calculated based upon the following formula:
The Settlement Administrator shall divide the Net Settlement Amount by the total number of pay periods Class Members were employed during the Class Period, in order to determine the amount to which each Class Member is entitled for each pay period he or she was employed by Grainger within the Class Period (the " Weekly Amount"). The Settlement Administrator will multiply the Weekly Amount by the total number of pay periods that each Class Member was employed by Grainger during the Class Period.
(Doc. 26 at 35, Settlement ¶ 62.) Consequently, the exact amount each receives depends upon how many class members submit timely and valid claim forms.
The Settlement provides that Plaintiffs and Class Members, other than those who elect not to participate in the Settlement, at the time final judgment is entered, shall release Defendant from the claims arising in the class period. Specifically, the release for class members provides:
" Released Claims" shall mean any and all claims, demands, rights, debts, obligations, costs, expenses, wages, liquidated damages, statutory damages, penalties, liabilities, and/or causes of action of any nature and description whatsoever, whether known or unknown, at law or in equity, whether concealed or hidden, whether under federal, state, and/or local law, statute, ordinance, regulation, common law, or other source of law, which were asserted in the Action or could have been asserted against the Released Patties arising out of, derived from, or related to the facts and circumstances alleged in the Complaint.
(Doc. 26 at 21, Settlement ¶ 33; Doc. 25 at 13.)
The release for Plaintiff encompasses more claims than the release of Class Members, providing the release of any claims that could have arisen during the course of her employment with Defendant. (Doc. 26 at 39, Settlement ¶ 75; Doc. 25 at 14.) Specifically, Plaintiff's release provides:
The Named Plaintiff, on behalf of herself and her heirs, executors, administrators, and representatives, shall and does hereby forever release, discharge and agree to hold harmless the Released Parties from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorney fees and costs), known or unknown, at law or in equity, which she may now have or may have after the signing of this Stipulation, against Defendant arising out of or in any way connected with her employment with Grainger including, the Released Claims, claims that were asserted or could have been asserted in the Complaint, and any and all transactions, occurrences, or matters between the parties occurring prior to the Preliminary Approval Date.
(Id.) Thus, claims released by Plaintiff, but not Class Members, include any claims arising under the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, and the Employee Retirement Income Security Act. (Id. at 40, ¶ 45.)
III. Objections and Opt-Out Procedure
Any class member who wished had an opportunity to object or elect not to participate in the Settlement. The Class Notice Packet explained the procedures for Class Members to claim object to the settlement, or elect not to participate in the settlement. ( See Doc. 34, Exh. 1; Doc. 35). In addition, the Class Notice Packet explained claims that were to be released by Class Members as part of the settlement. (Id.)
IV. Service of the Notice Packets and Responses Received
On August 13, 2014, the Court ordered the Settlement Administrator, Simpluris, Inc., to mail the Class Notice Packet to Class Members no later than September 30, 2014. (Doc. 33 at 17-18.) Simpluris served the Class Notice Packet to the extent possible. ( See generally, Doc. 45.) The Class Notice Packets were mailed via the United States Postal Service to 2, 047 the Class Members identified by Defendant. (Behring Decl. ¶ ¶ 6-8.)
According to Danielle Behring, case manager for Simpluris, four Class Notice Packets were returned to Simpluris with forwarding addresses, which Simpluris re-mailed. (Doc. 45 at 3, Behring Decl. ¶ 9.) In addition, the United States Postal Service returned several packets as undeliverable. (Id., ¶ 10.) Simpluris attempted to locate the current addresses for these individuals, and re-mailed 39 of the Notice Packets. (Id.) After the additional searches for correct addresses, only 18 Class Notice Packets remained undeliverable. (Id.) On October 21, 2014, a postcard reminder was mailed to the 1, 899 Class Members who had not submitted a Claim Form or an Exclusion Form. (Id. at 4, ¶ 12.) Simpluris received 94 Exclusion Forms, of which eight " were determined invalid due to the Class Members also having timely filed Claim Forms." (Id. at 5, ¶ 16.)
Ms. Behring reports Simpluris received Claim Forms from 909 Class members. (Doc. 45 at 4, Behring Decl. ¶ 14.) She asserts: " [T]he highest Settlement Share to be paid is approximately $2, 305.15 and the average Settlement Share to be paid is approximately $1, 397.62, which includes the 65% minimum payout allocation and the LWDA amount allocated to the Class Claimants. The valid claims account for approximately 65% of the Net Settlement Amount or $1, 305, 200.00." (Id. at 4-5, emphasis omitted.) No objections to the Settlement were mailed to Simpluris or filed with the Court.
APPROVAL OF A CLASS SETTLEMENT
I. Legal Standard
When parties reach a settlement agreement prior to class certification, the Court has an obligation to " peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement." Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Approval of a class settlement is generally a two-step process. First, the Court must assess whether a class exists. Id. (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)). Second, the Court must " determine whether the proposed settlement is fundamentally fair, adequate, and reasonable." Id. (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 2998)). The decision to approve or reject a settlement is within the Court's discretion. Hanlon, 150 F.3d at 1026.
II. Certification of a Class for Settlement
Class certification is governed by the Federal Rules of Civil Procedure, which provide that " [o]ne or more members of a class may sue or be sued as representative parties on behalf of all." Fed.R.Civ.P. 23(a). Under the terms of the Settlement, the proposed class is comprised of " All current and former employees who were employed by W.W. Grainger, Inc. in California at any time from May 31, 2009 through the Preliminary Approval Date who have not settled all of the claims asserted herein." (Doc. 29 at 3.)
Parties seeking class certification bear the burden of demonstrating the elements of Rule 23(a) are satisfied, and " must affirmatively demonstrate . . . compliance with the Rule." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011); Doninger v. Pacific Northwest Bell, Inc., 564 F.2d 1304, 1308 (9th Cir. 1977). If an action meets the prerequisites of Rule 23(a), the Court must consider whether the class is maintainable under one or more of the three alternatives set forth in Rule 23(b). Narouz v. Charter Communs., LLC, 591 F.3d 1261, 1266 (9th Cir. 2010). Here, Plaintiff argues " all requirements of Rule 23 are satisfied with respect to the proposed Settlement Class." (Doc. 43 at 16).
A. Rule 23(a) Requirements
The prerequisites of Rule 23(a) " effectively limit the class claims to those fairly encompassed by the named plaintiff's claims." General Telephone Co. of the Southwest. v. Falcon, 457 U.S. 147, 155-56, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982) (citing General Telephone Co. v. EEOC, 446 U.S. 318, 330, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980)). Rule 23(a) requires:
(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.
Id. These prerequisites are generally referred to as numerosity, commonality, typicality, and adequacy of representation. Falcon, 457 U.S. at 156.
A class must be " so numerous that joinder of all members is impracticable." Fed.R.Civ.P. 23(a)(1). This requires the Court to consider " specific facts of each case and imposes no absolute limitations." EEOC, 446 U.S. at 330. Although there is no specific numerical threshold, joining more than one hundred plaintiffs is impracticable. See Jordan v. county of Los Angeles, 669 F.2d 1311, 1319 & n.10 (9th Cir. 1982) (finding the numerosity requirement was " satisfied solely on the basis of the number of ascertained class members" and listing thirteen cases in which courts certified classes with fewer than 100 members), vacated on other grounds, 459 U.S. 810, 103 S.Ct. 35, 74 L.Ed.2d 48 (1982). Here, the Settlement Class includes more than 2, 000 individuals. (Doc. 43 at 17, citing Behring Decl. ¶ 6.) Therefore, the numerosity requirement is satisfied.
Rule 23(a) requires " questions of law or fact common to the class." Fed.R.Civ.P. 23(a)(2). Commonality " does not mean merely that [class members] have all suffered a violation of the same pro-vision of law, " but " claims must depend upon a common contention." Dukes, 131 S.Ct. at 2551. In this case, the parties fail to identify any common questions of fact and law. However, the parties stipulate that the requirements of Rule 23 are satisfied. Accordingly, the Court finds the commonality requirement is satisfied for purposes of settlement.
The typicality requirement demands that the " claims or defenses of the representative parties are typical of the claims or defenses of the class." Fed.R.Civ.P. 23(a)(3). A claim or defense is not required to be identical, but rather " reasonably co-extensive" with those of the absent class members. Hanlon, 150 F.3d at 1020. " The test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct." Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (internal quotation marks and citation omitted); see also Kayes v. Pac. Lumber Co., 51 F.3d 1449, 1463 (9th Cir. 1995) (typicality is satisfied when named plaintiffs have the same claims as other members of the class and are not subject to unique defenses).
Review of the Complaint demonstrates Plaintiff alleged that she was employed by Defendant for fifteen years, including during the relevant time period. (Doc. 14 at 10, ¶ 20.) In addition, Plaintiff alleged that " she worked under the same wage and hour policies as other Class Members." ( See Doc. 43 at 17.) As a result, Plaintiff " suffered injuries similar to those of the rest of the class, " and has the same interest in redressing the injuries. (Id.) Accordingly, the typicality requirement is satisfied.
4. Fair and Adequate Representation
Absentee class members must be adequately represented for judgment to have a binding effect. Hansberry v. Lee, 311 U.S. 32, 42-43, 61 S.Ct. 115, 85 L.Ed. 22 (1940). Accordingly, representative parties must " fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a)(4). " [R]esolution of this issue requires that two questions be addressed: (a) do the named plaintiffs and their counsel have any conflicts of interest with other class members and (b) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?" In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 462 (9th Cir. 2000) (citing Hanlon, 150 F.3d at 1020).
a. Class counsel
As the Court noted previously, S. Brett Sutton and Jared Hague reported they " have significant experience litigating wage and hour class action cases and in serving as class counsel, " and " neither [they], nor any member of the firm, have any personal affiliation or family relationship with the plaintiffs and proposed Class Representatives." (Doc. 33 at 8, quoting Sutton Decl. ¶ ¶ 5, 28 and Hague Decl. ¶ ¶ 5, 10.) In addition, Defendant does not ...